Portage salarial in France: how does that self-employed status work ?

Portage salarial can be seen as a rather strange option, considering all the other statuses available to the self-employed workers in France (auto-entreprise, SASU, EURL).

When first hearing about this status, freelancers are often surprised by this option, which provides them with the security of a permanent contract, while retaining the freedom of the freelance status.

So, what exactly is portage salarial?

What are the implications for the salariés portés (the freelancers working under the portage salarial status)? And for their clients?

Who can work under the portage salarial status?

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What is portage salarial ?‍

Portage salarial is a status in France, that allows a self-employed worker to benefit from the same social security coverage and the same rights as an employee.

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The freelance goes through a portage salarial company (an umbrella company) which provides the freelance with an employment contract on a permanent (CDI) or fixed-term (CDD) basis.

This contract allows the freelance (called "salarié porté" in French) to contribute and benefit from the same social advantages as a "traditional" employee (retirement pension, public health care, unemployment benefits).

The umbrella company also collects the freelance’s turnover and "transforms" it into a salary transferred back to the freelance.

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The status was introduced in the late 1980s and was enacted into labour law in 2008.

Since 2017, it operates under a dedicated collective agreement (collective agreement of portage salarial of 22 March 2017 (IDCC n°3219)

How does is work?‍

The legal definition of portage salarial gives us a good overview of how it operates:

"Portage salarial refers to the organized structure of:

• On the one hand, the relationship between an "umbrella company" providing a service and a client company using this service, which results in the conclusion of a commercial contract for the provision of a portage salarial service.
• On the other hand, the employment contract concluded between the umbrella company and an employee referred to as the "salarié porté" (the freelance), who is remunerated by this company."

Portage salarial is a contractual relationship between a freelance, a client company and the umbrella company. The substance of the contract remains the same as with a "traditional" job contract: it entails the exchange of a service provided by the freelance in return for payment by the client company. To find out more about the remuneration part, you can do a salary calculation under the portage salarial status. As for the umbrella company, it acts as an intermediary.

The relationship between the freelance and the client company

The freelance and his/her client are linked by a commercial service contract.

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In particular, this contract defines:

• The objective of the project/gig;
• Its planned starting and ending dates;
• The price invoiced by the freelance, the method of invoicing (e.g. lump sum or daily rate), and the deadline for payment of invoices;
• The fee charged to the client;
• The conditions for carrying out the mission (remote work, on-site work).

Then, for the elements that are not mentioned in the contract, the freelance retains a lot of freedom. For example, the freelance is free to manage his/her own work schedule and time off.

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The client company also benefits from great flexibility with regards to the freelance. The client is only bound to the freelance by the service contract. The freelance does not become part of the company's staff and is not considered as one of its employees.

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The relationship between the freelance and the umbrella company

The freelance and the umbrella company are linked by an employment contract. The contract can be a fixed-term contract (CDD), with fixed start and end dates, or a permanent contract (CDI). Under the portage salarial status , CDDs are rather rare because they offer few advantages. For example, CDDs under the portage salarial status are entitled to a temporary work bonus (“prime de précarité”).

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Like any employment contract, the freelance employment contract includes:

• The start date of the contract;
• The duration of the trial period;
• Working time, rest time and holiday terms;
• The commission fee (or subscription fee in the case of Jump) charged by the umbrella company;

However, unlike a standard employment contract, the employment contract of a freelance under portage salarial does not mention anything related to remuneration calculation. Remuneration is the result of a negotiation between the employee and the client company in which the umbrella company is not involved.

The employment contract also states that the freelance is free to choose his or her own projects and clients.

Once the employment contract has been signed by both parties, the umbrella company is responsible for collecting the payments invoiced by the freelance and for paying back the freelance wages in accordance with the minimum wage. This responsibility includes the declaration and payment of various social contributions (employee and employer) and the management of income tax collection via the Pay As You Earn (PAYE) system (called “prélèvement à la source - PAS” in French).

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The relationship between the client company and the umbrella company

The client company and the umbrella company are linked by the commercial service contract.

The collective agreement on portage salarial also provides for the specific obligations of the umbrella company towards the client company.

In particular, the umbrella company is responsible for helping the freelance to negotiate and prepare the commercial service contract. The umbrella company then ensures service follow up and makes sure that everything runs smoothly. Finally, the umbrella company is responsible for all the paperwork (providing access for issuing invoices, collecting payments, etc.)

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What are the advantages of the portage salarial status?

Now that we took a closer look at how the status works, let's move on to the advantages of portage salarial both for freelancers and client companies.

The advantages for the freelancer

Comprehensive social protection

Just like traditional employees, freelancers working under the portage salarial status benefit from full social protection. They are affiliated to the general social security plan and contribute to unemployment and retirement funds (both primary and supplemental retirement plans). Therefore, they enjoy the same health protection and the same unemployment and pension rights as employees.

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Freedom and flexibility

While portage salarial brings freelancers closer to the protective conditions of an employee, the status also gives them a great deal of flexibility in their work. The freelance working under the portage salarial status, like any self-employed worker, is free to choose his or her own clients and assignments, as well as to negotiate prices. In this respect, the freelance has no obligations towards the client company or the umbrella company. They are also free to manage their working hours and holidays.

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Better access to loans

Freelancers working under the portage salarial status with a CDI also benefit from a better understanding by banks when it comes to financing projects, such as for a property loan. For the latter, a portage salarial contract provides better security for the bank: if a problem occurs, the freelance will benefit from the same social protection mechanisms (unemployment, insurance) as an employee.

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Easy paperwork

Finally, unlike the classic self-employed statuses (auto-entreprise, SASU, EURL), the freelance working under the portage salarial status benefits from great administrative convenience. The status does not require the creation of a legal entity or a specific declaration and is not associated with any accounting obligations. The umbrella company is responsible for receiving payments, managing social contributions and income tax payments (via the PAYE system). The only thing left for the freelance to do is to issue invoices and claim business expenses.

The advantages for the client company

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For companies, portage salarial is also a good way to temporary bring in expert skills.

Hiring made easy

The first advantage for the client company is to be able to hire, without this person weighing on the company's payroll or generating long-term obligations.

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The use of portage salarial also considerably limits the risk of the contract being reclassified as a permanent contract.

Attractive working terms

Portage salarial also allows the client company to hire experts in an attractive context for the freelance. The latter enjoys full protection, while retaining a large degree of independence.

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Support in times of difficulty

Finally, the client company benefits from the support of the umbrella company, which manages all invoicing and can mediate in the event of difficulties with the freelance. The client company is no longer alone in handling its relationship with the freelance.

What are the types of portage salarial contracts?

Under the portage salarial status, the freelance enjoys all these advantages whether he or she is on a permanent (CDI) or fixed-term (CDD) contract.

However, the conditions for working under the portage salarial status are not the same depending on the type of employment contract you choose.

First of all, the CDD can only be renewable twice for a maximum duration of 18 months, including renewals. If you opt for a CDI, there is no time limit.

In addition, the conditions for renewing a CDD are restrictive and requires a waiting period between 2 contracts.

Then your employment contract will be viewed differently by your banker and landlord depending on its type. In practice, they tend to be more reluctant to trust a person with a CDD than a person with a CDI. If you have real estate plans, a CDI is highly recommended.

Finally, the termination of a CDD is strictly regulated by the Labour Code, and leaves little freedom to the freelance and the umbrella company...

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At Jump, as we recognize all the advantages provided by a CDI to freelancers, we have decided to only offer CDIs to our freelancers.

How does it work abroad?

Portage salarial is a status suited for international business, regardless of the type of project the freelance has.

Portage salarial allows the freelance to carry out assignments for foreign clients.

The only thing to bear in mind is the payment terms. Indeed, payment deadlines might be different and take longer when coming from abroad and the currency of payment will have to be reviewed (to limit exchange costs when the payment is made in another currency than Euro).

You can also work as a travelling/nomad freelance under the portage salarial status. The freelance can keep his/her status provided that he/she returns to France at least once every 182 days, even if the return to France is for a limited period.

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What kind of jobs can I do under this status?

Historically, portage salarial was invented at the end of the 1980s by executives who were looking for a way to continue their professional activity outside the traditional framework of employment.

Although it has since greatly evolved, portage salarial remains limited to certain jobs, such as digital marketing, data, IT or computer science.

It is worth noting that portage salarial is prohibited for regulated professions (doctors, lawyers, accountants, architects, etc.) as these jobs already have their own collective agreement.

The portage salarial collective agreement also excludes workers performing personal service activities (domestic and construction work for individuals, gardening, childcare, etc.)

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How to choose your umbrella company?

There are approximately 100 to 600 umbrella companies in France.

Some are specialized in professional training, real estate or recruitment for example, but most are open to any kind of freelance jobs. Making the right choice when so many options exist can be tough.

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To find the best umbrella company, we recommend that you take into account three criteria:

• The first is the management fee charged by your umbrella company. Most umbrella companies charge a commission on turnover (Jump charges a fixed fee). The lower the fee, the more money you will have left for your salary at the end of the month. Thus, this is an important factor to take into consideration.
• Then there is the quality of the service provided: is it possible to write and share contracts online? How easy is it to retrieve invoices? To collect payments? Most umbrella companies started in the 1990s and some have struggled to modernise the way they operate. This is a key consideration if you want to make your daily life easier.
• Finally, support plays an important role. Freelancers often choose the portage salarial status to avoid being isolated and to be able to benefit from support. Make sure that your umbrella company provides you with expert and proactive people for support. Good support will also save you valuable time.

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Freelancers under the portage salarial status

Finally, here are some examples of how portage salarial can be useful the everyday life of the freelance.

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Example 1: Clarisse, UX designer

Clarisse has been working in end-user research and interface design for 10 years. After many years working as an employee, she was looking for a status that would allow her to have more flexibility in her working hours, while giving her some protection.

Clarisse now works as a freelance under the portage salarial status with start-ups. She carries out months-long assignments for which these companies do not have the necessary resources.

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Example 2: Michel, retired IS expert

Michel has worked for many years in the banking sector. He retired a few months ago and now works as a freelance consultant to carry on a part-time job and supplement his income.

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Example 3: Cyril, web designer working under the auto-entrepreneur status who has exceeded the turnover cap

Cyril regularly exceeds the income cap of his auto-entrepreneur status. He uses portage salarial to invoice some of his clients and thus avoid reaching the turnover cap of his micro-entreprise regime.

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Example 4: Estelle, real estate project

Estelle is a recruitment specialist. After several years at the head of her own company, she chose portage salarial to embark on a property purchase project. She knows that the banks will welcome her more favorably with her new status.